Student Housing: Opening New Opportunities for Growth

Stanza Living, a tech-enabled student housing brand, recently started operation in new seven cities. Established in 2017, the company already has a presence in Delhi-NCR, Bangalore, Jaipur, Hyderabad, Chennai, Coimbatore, Indore, Pune, Baroda, and Dehradun.

 “We aim to reimagine student living for the millions of students migrating in the country, with our hassle-free, tech-enabled and service-led housing experience. Our entry into these educational hubs is a step towards building a pan-India student living brand, where residents can be assured of comfort, convenience, and community experience at transparent rents,” said Anindya Dutta, Co-Founder, Stanza Living.

Staza is not the only company in this segment. Many companies are now primarily focusing on the needs of migrant students and offering student living exclusively. Some of the leading names include Oxfordcaps, Student housing, and Placio. In fact, OYO, a leading hospitality company, also announced their plans to enter the student housing segment.  After all, there is a huge opportunity. According to UNESCO, between 2007 and 2017, the number of internationally mobile students grew by 64% to over five million, which is expected to reach eight million by 2025.

As per a recent Savills report, titled Global Student Housing Investment, for the third year in a row, global student housing investment volumes exceeded $16 billion in 2018.

From a niche investment option to a global asset class, the way student housing has metamorphosed is nothing short of remarkable. While at a global level, student accommodation is already considered as one of the most lucrative real estate asset classes, it is interesting to see Indian markets catching up. 

India: a growth opportunity

Currently, in India, the student accommodation mainly comprises of buildings that primarily offer residential accommodation for large numbers of students in boarding schools, colleges, or universities. Other than that, the trend of paying guests have caught the pace. However, if we compare the standards of facilities provided in India and other countries, there is a stark difference. There is also a huge demand and supply gap.

With several private educational institutions sprouting in almost every city, the education sector in India is growing at a rapid pace. Every year, several students migrate to metropolitan cities in pursuit of better educational opportunities. Thus, the need for ‘custom-made’ student housing is perennial.

Besides catering to the needs of students, this segment is also expected to generate higher returns for investors. According to a 2018 report by JLL, a real estate consulting firm, “student housing has the potential to yield more than 12% returns vis-a-vis the core commercial sector in which returns remain range-bound between 7% and 10%. Further, this sector is expected to grow at 38% CAGR until 2020, to Rs 2,400 Crore.”

Both investors and developers can cash on this great opportunity. With mounting unsold inventories, if the location is apt, developers can probably convert their under-construction or constructed units into student accommodation.

Leave a Reply

Your e-mail address will not be published. Required fields are marked *